The worst way to solve a technological problem is to treat a particular solution as the final solution. That is to say you look at the "solution" as the best solution without looking at other potential solutions. In algorithmic terms this is called a depth-first search. You basically go down a path until you come to a dead end. If the dead end is not your solution then you back up and go down another path. This is fine if the problem is simple, but if it is complex then you need another kind of search called the bread-first search. In this kind of search you search in parallel--you search all paths at one time. This is what the free market exactly does when developing a technological solution to a specific problem. More than one technology competes until the best technology at the time is chosen to solve the problem.
Now, enter the government. Let's say there is a problem called it 'A' that the gov't wants to solve. There are ten potential solutions currently to that problem. Each solution is a business that is just in the developing stages of a solution. The gov't encourages potential solution 1 by giving it a subsidy and ignores the other solutions. To the other businesses this is unfair. But not only that but what if it turns out solution 1 had very bad side effects once it is completely developed or one of the other solutions was better at solving the problem with fewer side effects. The taxpayers' money just went down the drain. Keep in mind as knowledge increases technology changes. Because of that gov't (or anyone for that matter) cannot possible know everything about a particular problem at a given time. Also, by gov't endorsing a particular technology that sends a signal to businesses to stop researching a particular solution that is not endorsed by the gov't. Especially if there is money involved. Using my search analogy, the gov't was using a depth-first search by endorsing only one type of technology. The free market should decide the best-suited technology. If a business can get private individuals or organizations to give or loan it money to research and develop a particular technology, that's great. All the power to the business. The taxpayers does not have to foot the bill and a best solution was reached efficiently.
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